BCE reports 2008 fourth quarter results and announces 2009 business outlook



    
    This news release contains forward-looking statements. For a description
    of the related risk factors and assumptions please see the section
    entitled "Caution Concerning Forward-Looking Statements" later in this
    release.

    - Common share dividend increased by 5% to $1.54 per year
    - Net loss per share of $0.06; Adjusted EPS(1) for quarter of $0.55
    - Bell EBITDA up 3% in Q4; up 2.2% for full year
    - Improving postpaid wireless net additions - 80,000
    - Fifth consecutive quarter of fewer YOY residential line losses
    

    MONTREAL, Quebec, Feb. 11 /CNW Telbec/ - BCE Inc. (TSX, NYSE:   BCE),
Canada's largest communications company, today reported BCE and Bell results
for the fourth quarter of 2008 and announced its guidance for 2009, including
a 5% increase in its annual common share dividend.
    Bell reported solid EBITDA growth, its fifth consecutive quarter of
decreased year-over-year residential local access line losses, and steady
progress in the operating performance of its wireless and wireline segments.
    "This was another quarter of clear progress by the Bell team in executing
on our strategic imperatives in order to achieve our goal: to be recognized by
customers as Canada's leading communications company," said George Cope,
President and Chief Executive Officer of BCE and Bell Canada. "With a clear
goal and strategy, improving operating performance, and a sound financial
strategy, we are in a strong position to grow our free cash flow and earnings
and return value to our shareholders now - as with the dividend increase
announced today - and going forward."
    At year end 2008, BCE had in excess of $3 billion in cash and cash
equivalents on its balance sheet. Together with the ability to generate strong
free cash flow, this places BCE in the position of being able to self-finance
its business plan and meet pension funding and maturing debt requirements over
the next two years without having to access capital markets. BCE believes this
prudent approach to its capital structure is especially appropriate in light
of the current economic environment.
    To demonstrate its commitment to return cash to shareholders through
consistent and sustainable dividend increases, BCE today announced that the
annual common share dividend will increase by 5% to $1.54 per share.
Accordingly, the Board has declared a quarterly dividend of $0.385 per common
share, payable on April 15, 2009 to shareholders of record at the close of
business on March 16, 2009.
    "BCE is setting a clear dividend policy with a target dividend payout of
65% to 75% of Adjusted EPS that provides sufficient financial flexibility to
continue investing in the business while growing returns to shareholders,"
said Siim Vanaselja, Chief Financial Officer of BCE. "BCE's improving
financial and operational progress provides us with confidence in our ability
to continue returning value to shareholders, as with the common share dividend
increase announced today and the Normal Course Issuer Bid (NCIB) common share
buyback program announced on December 12, 2008."
    To achieve its goal, Bell is executing on 5 Strategic Imperatives:
Improve Customer Service, Accelerate Wireless, Leverage Wireline Momentum,
Invest in Broadband Networks and Services, and Achieve a Competitive Cost
Structure. Bell's results for the fourth quarter of 2008 show clear progress
in the execution of its strategy.
    The Bell Wireless segment(2) had 80,000 postpaid net activations, or 3.9%
more than last year, and total net activations of 117,000. Postpaid churn
improved to 1.3% from 1.4%. Bell Wireless EBITDA(3) grew by 13.6% and EBITDA
margin on wireless service revenues increased to 43%.
    Wireline momentum continued with residential local access line (NAS)
losses declining to 72,000 this quarter from 117,000 in the same quarter last
year on the strength of customer winbacks and demand for Home Phone packages.
Video net activations were 14,000 this quarter, a significant improvement over
the 2,000 net activations in Q4 of 2007, due to improved sales in direct and
indirect channels.
    Total NAS declined by 9.1% over the last year. However, total NAS
declined by just 5.4% when normalized for the previously announced contract
termination with a major wholesale customer and a beginning-of-year adjustment
to Bell's residential NAS base following a review of historical records.
    Bell's operating revenues grew by 0.2% to $3,800 million this quarter as
growth in wireless, video, and data revenues offset declines in local and
access, long distance, and equipment and other revenues. Excluding product
sales, Bell's operating revenues grew by 1.2% this quarter. For the full year,
Bell's operating revenues were $14,873 million, an increase of 1.5% compared
to 2007.
    Bell's operating income was $520 million, or 6.6% lower than Q4 2007, due
to higher depreciation and amortization expense and higher restructuring and
other costs. For the full year, Bell's operating income was $2,143 million, a
decrease of 19.2% compared to 2007.
    Bell's EBITDA grew by 3.0% to $1,381 million due to growth in wireless
revenues and lower wireless subscriber acquisition and retention costs, partly
offset by slightly lower Bell Wireline EBITDA. Bell Wireline EBITDA this
quarter was negatively impacted by a loss of $28 million related to a
long-term Enterprise customer contract entered into in 2006. Excluding this
item, Bell's EBITDA grew by 5.1% this quarter. For the full year, Bell's
EBITDA was $5,638 million, or 2.2% higher than 2007.
    Bell invested $854 million of capital this quarter, an increase of 11.8%
compared to Q4 2007. On a full year basis, Bell invested $2,459 million of
capital, or 1.8% more than 2007. For the full year, Bell's capital intensity
was 16.5%. Capital expenditures focused on enhancing the wireless network and
the continuing expansion of the Fibre-to-the-node (FTTN) program, supporting
Bell's commitment to its strategic imperatives. Bell's FTTN footprint reached
2.4 million homes at the end of 2008. This program is being accelerated in
order to pass 5 million homes by 2012.
    BCE's cash from operating activities increased by 5.3% to $1,820 million
this quarter and by 3.1%, to $5,912 million for the full year. Free cash
flow(4) of $647 million this quarter was 0.6% lower than the same quarter last
year as higher capital expenditures were partly offset by higher cash from
operating activities. For the full year, free cash flow decreased to $1,689
million from $1,960 million in 2007 due in part to the purchase of advanced
wireless services (AWS) spectrum licences for $741 million in the third
quarter of 2008.
    BCE's net loss per share (EPS) was $0.06 for the quarter compared to
$2.93 for the same period last year. EPS this quarter included net losses on
investments of $372 million, or $0.47 per share and restructuring and other
costs of $0.14 per share. Net losses on investments this quarter relate to
write-downs on non-core investments as a result of the decline in capital
market valuations experienced in the last quarter of the year. EPS in Q4 2007
included a gain on the sale of Telesat of $2,300 million. For the full year,
EPS was $1.02 in 2008 compared to $4.88 in 2007.
    BCE's Adjusted EPS was $0.55 this quarter compared to $0.72 in Q4 2007
and was $2.25 for the full year compared to $2.34 in 2007. Adjusted EPS in Q4
2007 included the favourable resolution of past tax positions with the tax
authorities and the impact of statutory tax rate reductions. Excluding these
items, Adjusted EPS grew this quarter due mainly to higher EBITDA partly
offset by higher depreciation and amortization expense.

    
    Financial Highlights

    -------------------------------------------------------------------------
    ($ millions except per share amounts)     Q4 2008    Q4 2007   % change
    (unaudited)
    -------------------------------------------------------------------------
    Bell(i) Operating Revenues                 $3,800     $3,792        0.2%
    -------------------------------------------------------------------------
    BCE(ii) Operating Revenues                 $4,488     $4,518       (0.7%)
    -------------------------------------------------------------------------
    Bell EBITDA                                $1,381     $1,341        3.0%
    -------------------------------------------------------------------------
    BCE EBITDA                                 $1,740     $1,675        3.9%
    -------------------------------------------------------------------------
    Bell Operating Income                        $520       $557       (6.6%)
    -------------------------------------------------------------------------
    BCE Operating Income                         $663       $746      (11.1%)
    -------------------------------------------------------------------------
    BCE Cash From Operating Activities         $1,820     $1,729        5.3%
    -------------------------------------------------------------------------
    BCE Free Cash Flow(iii)                      $647       $651       (0.6%)
    -------------------------------------------------------------------------
    BCE EPS                                    ($0.06)     $2.93        n.m.
    -------------------------------------------------------------------------
    BCE Adjusted EPS(iv)                        $0.55      $0.72      (23.6%)
    -------------------------------------------------------------------------
    (i)   Bell includes the Bell Wireless and Bell Wireline segments.
    (ii)  BCE's results for Q4 2007 include Bell, Bell Aliant and Telesat up
          to the time of its sale on October 31, 2007 while BCE's results for
          Q4 2008 include only Bell and Bell Aliant.
    (iii) Beginning this quarter, BCE has refined the definition of Free Cash
          Flow. See item 4 in the section entitled "Notes" later in this news
          release for more information.
    (iv)  EPS before restructuring and other and net losses (gains) on
          investments
    n.m.: not meaningful


    On October 31, 2007, BCE completed the sale of Telesat. Accordingly, BCE's
results for Q4 2008 no longer reflect Telesat's financial results while BCE's
results for Q4 2007 include Telesat's results for October.
    BCE's operating revenues declined by 0.7% to $4,488 million this quarter
and by 0.3% to $17,698 million for the full year as revenue growth at Bell was
offset by lower revenue at Bell Aliant and the loss of Telesat's contribution
to revenue. BCE's operating income decreased by 11.1% to $663 million this
quarter due to higher restructuring and other charges at Bell Aliant and to
the loss of Telesat's contribution to operating income. For the full year,
BCE's operating income decreased by 17.7% to $2,864 million due to higher
restructuring and other charges at Bell and Bell Aliant and the loss of
Telesat's contribution to operating income. BCE's EBITDA increased 3.9% to
$1,740 million this quarter and by 0.1% to $7,004 million for the full year as
Bell and Bell Aliant's EBITDA growth was partly offset by the loss of
Telesat's contribution to EBITDA.

    Bell Wireless Segment

    The Bell Wireless segment had double digit EBITDA growth this quarter
along with solid postpaid net activations and improved postpaid churn.

    - Total Bell Wireless operating revenues grew by 2.3% to $1,135 million
      this quarter due to higher wireless service revenues partly offset by
      lower wireless product revenues. Wireless service revenues increased by
      5.4% to $1,033 million due to a larger subscriber base. Wireless
      product revenues decreased by 17.9% to $92 million due to lower gross
      activations as a result of slowing economic conditions and heightened
      market competition, particularly in the prepaid market. For the full
      year, Bell Wireless operating revenues grew by 7.6% to $4,481 million
      with wireless service revenues growing by 7.6% to $4,058 million and
      wireless product revenues growing by 13.6% to $377 million.
    - Postpaid and prepaid ARPU decreased by $1.06 and $1.24 to $65.69 and
      $16.40 respectively due to lower usage as customers reacted to a
      weakening economy partly offset by significant growth in wireless data
      revenues. Blended ARPU decreased by $0.43 to $54.22. For the full year,
      blended ARPU increased by 0.7% to $54.29 with postpaid ARPU increasing
      0.3% to $66.09 and prepaid ARPU increasing 0.2% to $17.14.
    - Bell Wireless operating income grew by 3.9% to $294 million this
      quarter and by 3.6% to $1,241 million for the full year as a result of
      higher EBITDA partly offset by higher depreciation and amortization
      expense and higher restructuring and other charges. Bell Wireless
      EBITDA grew by 13.6% to $444 million this quarter due to higher
      revenues and lower subscriber acquisition and retention costs. Higher
      revenues and lower subscriber acquisition and retention costs also led
      to EBITDA flow-through of 100% this quarter. For the full year, Bell
      Wireless EBITDA grew 7.9% to $1,770 million.
    - EBITDA margins on wireless service revenues increased to 43% this
      quarter, or by over 3 percentage points when compared to the same
      period last year.
    - Total gross activations were 470,000 this quarter, or down 7.8% from
      last year's record high.
    - Postpaid net activations grew by 3.9% to 80,000 this quarter. Prepaid
      net activations decreased to 37,000 from the 118,000 experienced last
      year due to fewer prepaid gross activations and higher churn. Total net
      activations were 117,000 this quarter, compared to 195,000 last year.
    - The Bell Wireless client base reached 6,497,000, up 4.5% over last
      year. This total reflects the removal of the remaining 37,000 analogue
      subscribers with the decommissioning of the analogue network, which
      occurred in the fourth quarter. Additionally, the tightening of Virgin
      Mobile Canada credit and activation processes resulted in 32,000 Virgin
      postpaid subscribers being removed from the subscriber base. These
      adjustments are not included in the net activation or churn metrics.
    - Postpaid churn improved to 1.3% from 1.4% last year while prepaid churn
      increased to 3.3% from 2.7%. Blended churn was stable at 1.7%.
    - Cost of acquisition decreased by 4.8% to $373 per gross activation due
      to lower handset subsidies and lower commissions.

    Bell Wireline Segment

    The Bell Wireline segment continued to reduce the number of residential
NAS losses and showed continued improvement in video net additions this
quarter.

    - Bell Wireline operating revenues decreased by 0.7% to $2,726 million
      this quarter and by 0.7% to $10,640 million for the full year as gains
      in video and data revenues were more than offset by decreases in local
      and access, long distance and equipment and other revenues.
    - Bell Wireline operating income decreased by 17.5% to $226 million this
      quarter due lower EBITDA and higher depreciation and amortization
      expense. For the full year, Bell Wireline operating income decreased by
      38% to $902 million. Bell Wireline EBITDA decreased by 1.4% to
      $937 million this quarter due to the margin loss related to the ongoing
      erosion of our NAS customer base and the charge to income of
      $28 million of previously deferred costs related to an Enterprise
      customer contract partly offset by cost savings from Bell's 100-day
      plan initiatives. For the full year, Bell Wireline EBITDA decreased by
      0.3% to $3,868 million.
    - Local and access revenues declined by 6.5% to $825 million this quarter
      due to ongoing NAS erosion.
    - Residential NAS declined by 72,000 this quarter, an improvement of
      45,000 over the decline of 117,000 experienced in 2007 reflecting the
      strength of customer winbacks and demand for Home Phone packages.
      Business NAS declined by 28,000 this quarter compared to a decline of
      22,000 in the same quarter last year.
    - Total NAS declined by 9.1% in 2008. However, when normalized for the
      contract termination with a major wholesale customer and a beginning-
      of-year adjustment to residential NAS following a review of historical
      records, total NAS declined by 5.4%.
    - Long distance revenues declined by 5.7% to $279 million this quarter
      due mainly to ongoing NAS erosion partly offset by pricing initiatives.
    - Data revenues increased 5.3% to $1,009 million this quarter due to
      growth in Internet, IP Broadband and ICT revenues partly offset by the
      further erosion of legacy data services.
    - High-speed Internet customer connections increased by 8,000 this
      quarter, compared to 29,000 in Q4 2007, due to lower overall market
      demand as a result of a weakening economy and the relatively high
      broadband Internet penetration rate. At the end of the quarter, Bell
      had 2,054,000 high-speed Internet customer connections, an increase of
      2.5% compared to the end of 2007.
    - Video revenues were $375 million this quarter, or 6.8% higher than last
      year due largely to an ARPU increase of $3.59 to $67.15. ARPU increased
      as a result of customer upgrades to higher-priced programming packages,
      higher rental fees and pricing initiatives.
    - Video EBITDA was $82 million this quarter, or 6.5% higher than last
      year, due to higher ARPU and a larger customer base.
    - Total video subscribers increased by 14,000 this quarter to reach a
      total of 1,852,000. For the full year, there were 30,000 net subscriber
      activations compared to 2,000 in 2007.
    - Video subscriber churn of 1.3% was unchanged from last year.
    - Equipment and other revenues decreased by 13.2% to $145 million due to
      lower customer premise equipment sales consistent with a continued
      focus on not pursuing low-margin business.

    Bell Aliant Regional Communications

    Bell Aliant's revenues decreased by 4.2% this quarter to $815 million due
primarily to the wind-down of Atlantic Mobility Products (AMP) following
Bell's notification to terminate its contract to use AMP as its exclusive
distributor in Atlantic Canada. Operating income decreased 19.7% to $143
million due to higher restructuring and other charges related to its announced
reduction of approximately 500 management positions.

    Normal Course Issuer Bid

    On December 12, 2008, BCE announced it would return capital to
shareholders in the form of a Normal Course Issuer Bid (NCIB). Under the NCIB,
BCE will repurchase up to approximately 5% of its outstanding common shares,
or about 40 million common shares. As of the end of day, February 10, 2009,
BCE has repurchased 20.0 million common shares, or approximately 50% of the
common shares targeted for repurchase under the NCIB.

    Outlook

    BCE's financial guidance for 2009 is as follows:

    -------------------------------------------------------------------------
                                                              Guidance 2009
    -------------------------------------------------------------------------
    Bell(i)
    -------------------------------------------------------------------------
    Revenues                                                         Stable
    -------------------------------------------------------------------------
    EBITDA(ii)                                                       Stable
    -------------------------------------------------------------------------
    Capital intensity                                              15% - 16%
    -------------------------------------------------------------------------
    BCE
    -------------------------------------------------------------------------
    Adjusted EPS growth(iii)                                greater than  5%
    -------------------------------------------------------------------------
    Free Cash Flow(iv)                                    $1,750 M - $1,900 M
    -------------------------------------------------------------------------
    Annualized common dividend                                        $1.54
    -------------------------------------------------------------------------
    (i)   Bell's 2009 financial guidance for revenue, EBITDA and capital
          intensity is exclusive of Bell Aliant.
    (ii)  EBITDA includes pension expense
    (iii) EPS before restructuring and other and net losses (gains) on
          investments
    (iv)  Free cash flow before common share dividends and including Bell
          Aliant distributions. The most comparable Canadian GAAP financial
          measure is cash from operating activities. For 2009, BCE expects to
          generate approximately $1,750 million to $1,900 million in free
          cash flow. This amount reflects expected BCE cash from operating
          activities of approximately $4.9 billion to $5.1 billion.


    BCE 2009 Analyst Meeting

    BCE's 2009 Analyst Meeting is being webcast live beginning at 9:00 am ET,
today from the company's website at www.bce.ca.

    Notes

    The information contained in this news release is unaudited.

    (1) The term adjusted net earnings does not have any standardized meaning
        according to Canadian GAAP. It is therefore unlikely to be comparable
        to similar measures presented by other companies. We use adjusted net
        earnings, among other measures, to assess the operating performance
        of our ongoing businesses without the effects of after-tax
        restructuring and other and net losses (gains) on investments. We
        exclude these items because they affect the comparability of our
        financial results and could potentially distort the analysis of
        trends in business performance. Excluding these items does not imply
        they are necessarily non-recurring. The most comparable Canadian GAAP
        financial measure is net earnings applicable to common shares. The
        following table is a reconciliation of net earnings applicable to
        common shares to adjusted net earnings on a consolidated basis and
        per BCE common share.

    ($ millions except per share amounts)
    -------------------------------------------------------------------------
                 Q4 2008         Q4 2007           2008            2007
    -------------------------------------------------------------------------
              TOTAL     PER   TOTAL     PER   TOTAL     PER   TOTAL     PER
                      SHARE           SHARE           SHARE           SHARE
    -------------------------------------------------------------------------
    Net
     earnings
     applicable
     to common
     shares     (48)  (0.06)  2,354    2.93     819    1.02   3,926    4.88
    Restructu-
     ring and
     other      117    0.14      93    0.11     572    0.71     206    0.25
    Net losses
     (gains)
     on
     invest-
     ments      372    0.47  (1,870)  (2.32)    420    0.52  (2,248)  (2.79)
    -------------------------------------------------------------------------
    Adjusted
     net
     earnings   441    0.55     577    0.72   1,811    2.25   1,884    2.34
    -------------------------------------------------------------------------

    (2) Consistent with North American industry practices, total wireless
        gross activations, net activations and subscribers include 100% of
        Virgin Mobile's subscribers. Wireless ARPU, churn, usage per
        subscriber and cost of acquisition continue to be computed by
        including 50% of Virgin Mobile's results, a level corresponding to
        Bell's ownership position.

    (3) The term EBITDA does not have any standardized meaning according to
        Canadian GAAP. It is therefore unlikely to be comparable to similar
        measures presented by other companies. We define EBITDA (earnings
        before interest, taxes, depreciation and amortization of intangible
        assets) as operating revenues less cost of revenue and selling,
        general and administrative expenses, meaning it represents operating
        income before depreciation and amortization of intangible assets and
        restructuring and other.

        We use EBITDA, among other measures, to assess the operating
        performance of our ongoing businesses without the effects of
        depreciation and amortization of intangible assets and restructuring
        and other. We exclude these items because they affect the
        comparability of our financial results and could potentially distort
        the analysis of trends in business performance. We exclude
        depreciation and amortization of intangible assets because it largely
        depends on the accounting methods and assumptions a company uses, as
        well as non-operating factors, such as the historical cost of capital
        assets. Excluding restructuring and other does not imply they are
        non-recurring.

        EBITDA allows us to compare our operating performance on a consistent
        basis. We believe that certain investors and analysts use EBITDA to
        measure a company's ability to service debt and to meet other payment
        obligations, or as a common measurement to value companies in the
        telecommunications industry.

        The most comparable Canadian GAAP financial measure is operating
        income. The following table is a reconciliation of operating income
        to EBITDA.

    ($ millions)

    BCE                            Q4 2008    Q4 2007       2008       2007
    -------------------------------------------------------------------------
    Operating income                   663        746      2,864      3,479
    Depreciation and amortization
     of intangible assets              870        783      3,269      3,184
    Restructuring and other            207        146        871        331
    -------------------------------------------------------------------------
    EBITDA                           1,740      1,675      7,004      6,994
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL                           Q4 2008    Q4 2007       2008       2007
    -------------------------------------------------------------------------
    Operating income                   520        557      2,143      2,652
    Depreciation and amortization
     of intangible assets              715        643      2,685      2,559
    Restructuring and other            146        141        810        308
    -------------------------------------------------------------------------
    EBITDA                           1,381      1,341      5,638      5,519
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

    BELL WIRELINE                  Q4 2008    Q4 2007       2008       2007
    Operating income                   226        274        902      1,454
    Depreciation and amortization
     of intangible assets              580        538      2,193      2,121
    Restructuring and other            131        138        773        304
    -------------------------------------------------------------------------
    EBITDA                             937        950      3,868      3,879
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL WIRELESS                  Q4 2008    Q4 2007       2008       2007
    Operating income                   294        283      1,241      1,198
    Depreciation and amortization
     of intangible assets              135        105        492        438
    Restructuring and other             15          3         37          4
    -------------------------------------------------------------------------
    EBITDA                             444        391      1,770      1,640
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (4) The term free cash flow does not have any standardized meaning
        according to Canadian GAAP. It is therefore unlikely to be comparable
        to similar measures presented by other companies. Effective Q4 2008,
        we define free cash flow as cash from operating activities and
        distributions received from Bell Aliant less capital expenditures,
        preferred share dividends, dividends/distributions paid by
        subsidiaries to non-controlling interest, other investing activities
        and Bell Aliant free cash flow. We consider free cash flow to be an
        important indicator of the financial strength and performance of our
        business because it shows how much cash is available to repay debt,
        pay dividends to common shareholders and to reinvest in our company.
        We present free cash flow consistently from period to period, which
        allows us to compare our financial performance on a consistent basis.
        The most comparable Canadian GAAP financial measure is cash from
        operating activities. The following table is a reconciliation of cash
        from operating activities to free cash flow on a consolidated basis.


    ($ millions)
    -------------------------------------------------------------------------
                                   Q4 2008    Q4 2007       2008       2007
    -------------------------------------------------------------------------
    Cash from operating activities   1,820      1,729      5,912      5,733
    Bell Aliant distributions to
     BCE                                72         71        290        282
    Capital expenditures            (1,022)      (916)    (2,988)    (3,144)
    Other investing activities           1          8       (726)        14
    Cash dividends paid on
     preferred shares                  (31)       (34)      (129)      (124)
    Cash dividends/distributions
     paid by subsidiaries to
     non-controlling interest          (92)       (88)      (366)      (404)
    Bell Aliant free cash flow        (101)      (104)      (304)      (399)
    Telesat free cash flow               -        (15)         -          2
    -------------------------------------------------------------------------
    Free cash flow                     647        651      1,689      1,960
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Supplementary Financial Information

    More information on BCE's 2008 Q4 results can be found in BCE's
Supplementary Financial Information, Fourth Quarter 2008, available at
http://www.bce.ca/en/investors/financialperformance/quarterlyresults/, filed
by BCE with the U.S. Securities and Exchange Commission under Form 6-K and
with Canadian securities commissions.

    Caution Concerning Forward-Looking Statements

    Certain statements made in this news release, including, but not limited
to, statements relating to our financial guidance and business outlook for
2009, and other statements that are not historical facts, are forward-looking
statements and are subject to important risks, uncertainties and assumptions.
    The results or events predicted in these forward-looking statements may
differ materially from actual results or events. As a result, we cannot
guarantee that any forward-looking statement will materialize and you are
cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements assume, in particular, that many of our lines
of business will be resilient to the current economic downturn. However, we
caution that the current adverse economic conditions make our forward-looking
statements and underlying assumptions subject to greater uncertainty and that,
consequently, they may not materialize. It is impossible to predict with
certainty the impact that the current economic downtown and credit crisis will
have on our business or residential customers' future purchasing patterns. The
forward-looking statements contained in this news release are made as of the
date of this release and, accordingly, are subject to change after such date.
Except as may be required by Canadian securities laws, we do not undertake any
obligation to update or revise any forward-looking statements contained in
this news release, whether as a result of new information, future events or
otherwise. Except as otherwise indicated by BCE, these statements do not
reflect the potential impact of any non-recurring or other special items or of
any dispositions, monetizations, mergers, acquisitions, other business
combinations or other transactions that may be announced or that may occur
after the date hereof. Forward-looking statements are provided for the purpose
of providing information about management's current expectations and plans
relating to 2009. Readers are cautioned that such information may not be
appropriate for other purposes.

    Material Assumptions

    A number of Canadian economic and market assumptions were made by BCE in
preparing forward-looking statements for 2009 contained in this release,
including, but not limited to: (i) Canadian GDP in 2009 will decrease by
approximately 1%, consistent with estimates by the six major banks in Canada,
(ii) the Bank of Canada's target overnight rate will remain fairly stable at
around 1%, (iii) the Consumer Price Index as estimated by Statistics Canada
will decline from 2008 levels to the range of 1.0% to 1.5% for 2009, (iv)
revenues generated by the residential voice telecommunications market in
Canada will continue to decrease in 2009 due to wireless substitution and
other factors including e-mail and instant messaging substitution, (v)
wireline competition in both the residential and business telecommunications
markets in Canada will continue in 2009, mainly from cable companies, (vi)
consumer spending on our local access telephony services will not be
materially affected by the economic downturn given the importance of those
services to both residential and business customers, (vii) the slowdown in the
housing market should help with residential local line customer retention,
(viii) most consumers are unlikely to abandon their home Internet connections,
TV entertainment or wireless phones during an economic downturn, as these
services are viewed as essential utilities, (ix) wireless industry penetration
growth in 2009 similar to 2008 and downward pressure on blended ARPU from our
competitors' discount brand pricing strategies, (*) the potential for new
wireless competitors to enter the market in the second half of 2009, (xi)
slower Internet and video market growth in 2009 than in the previous few years
as a result of the relatively high penetration rates for these services and a
reduced focus by our indirect retailers in actively selling these services and
supporting the product category, (xii) more conservative investments by
Enterprise customers may result in lower capital spending requirements to
support business customers, and (xiii) a softening of the SMB market in
Ontario and Québec will drive business NAS erosion higher.
    In addition, BCE's and Bell Canada's 2009 guidance is also based on
various internal financial and operational assumptions. Our guidance related
to Bell (excluding Bell Aliant) is based on certain assumptions concerning
Bell, including, but not limited to: (i) residential NAS losses will decline
in 2009, (ii) revenue guidance was derived in the context of a worsening
economy, (iii) Bell's total net benefit plans cost, which is based on a
discount rate of 7.0% and a 2008 return on pension plan assets of
approximately (19.5%), is expected to be approximately $260 million in 2009,
(iv) Bell's 2009 retirement benefit plans funding is estimated to be
approximately $500 million, based on a 10-year amortization of the pension
solvency deficits that arose during 2008, (v) Bell's capital intensity in 2009
is estimated to be in the 15% to 16% range, (vi) Bell will continue to invest
in extending its fibre network to pass additional households in order to
strengthen its competitive position against cable companies, and (vii) Bell's
100-day plan annualized cost savings and other cost reduction opportunities to
be approximately $400 million.
    Our guidance related to BCE is based on certain assumptions for 2009,
including, but not limited to: (i) restructuring and other charges in the
range of $250 million to $300 million, (ii) depreciation and amortization
expense essentially unchanged when compared to 2008, (iii) an effective tax
rate of approximately 20%, while the statutory tax rate is approximately 32%,
(iv) relatively stable cash taxes for 2009 to 2011 with the accelerated
utilization of investment tax credit carry-forwards, (v) EPS to be positively
impacted in 2009 by the planned repurchase of up to 40 million common shares
under BCE's normal course issuer bid that commenced in December 2008, and (vi)
long-term debt maturing in 2009 is to be permanently repaid.
    BCE's forward-looking statements for time periods subsequent to 2009
involve longer term assumptions and estimates than forward-looking statements
for 2009 and are consequently subject to greater uncertainty. Therefore, you
are especially cautioned not to place undue reliance on such long-term
forward-looking statements. The forward-looking statement concerning BCE's
cash taxes for 2009 to 2011 assumes no significant escalation in cash taxes
given the accelerated utilization of Bell's investment tax credit
carry-forwards.
    The foregoing assumptions, although considered reasonable by BCE at the
time of preparation of its financial guidance and business outlook and other
forward-looking statements, may prove to be inaccurate. Accordingly, our
actual results could differ materially from our expectations as set forth in
this news release.

    Material Risks

    Factors that could cause actual results or events to differ materially
from those expressed in or implied by our forward-looking statements include:
general economic and credit market conditions, the level of consumer
confidence and spending, and the demand for, and prices of, our products and
services; our ability to implement our strategies and plan in order to produce
the expected benefits; our ability to continue to implement our cost reduction
initiatives and contain capital intensity while seeking to improve customer
service; the intensity of competitive activity, including the increase in
wireless competitive activity that could result from Industry Canada's
licensing of advanced wireless services spectrum, and the resulting impact on
our ability to retain existing, and attract, new customers, and on our pricing
strategies and financial results; increased contributions to retirement
benefit plans; our ability to respond to technological changes and rapidly
offer new products and services; events affecting the functionality of, and
our ability to protect, maintain and replace, our networks, information
technology systems and software; events affecting the ability of third-party
suppliers to provide to us essential products and services; labour
disruptions; the potential adverse effects on our Internet and wireless
businesses of the significant increase in broadband demand; events affecting
the operations of our service providers operating outside Canada; our ability
to raise the capital we need to implement our business plan, including for
BCE's share buy-back program and dividend payments and to fund capital and
other expenditures; our ability to discontinue certain traditional services as
necessary to improve capital and operating efficiencies; regulatory
initiatives or proceedings, litigation and changes in laws or regulations;
launch and in-orbit risks of satellites used by Bell TV; competition from
unregulated U.S. direct-to-home satellite television services sold illegally
in Canada and the theft of our satellite television services; BCE's dependence
on its subsidiaries' ability to pay dividends; stock market volatility;
depending, in particular, on the economic, competitive and technological
environment at any given time and subject to dividends being declared by the
board of directors, there can be no certainty that BCE's dividend policy will
be maintained; Bell Aliant's ability to make distributions to BCE and Bell
Canada; health concerns about radio frequency emissions from wireless devices;
delays in completion of the HSPA overlay of our wireless network and the
successful implementation of the network build and sharing arrangement with
Telus to achieve cost efficiencies and reduce deployment risks; and loss of
key executives.
    For additional information with respect to certain of these and other
assumptions and risks, please refer to BCE's Safe Harbour Notice Concerning
Forward-Looking Statements dated February 11, 2009 filed by BCE with the
Canadian securities commissions (available at www.sedar.com) and with the U.S.
Securities and Exchange Commission (available at www.sec.gov). This document
is also available on BCE's website at www.bce.ca. For additional information,
please refer to the presentations made at the February 11, 2009 Bell Analyst
Meeting available on BCE's website.

    About BCE

    BCE is Canada's largest communications company, providing the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Under the Bell brand, the Company's services
include local, long distance and wireless phone services, high-speed and
wireless Internet access, IP-broadband services, information and
communications technology services (or value-added services) and
direct-to-home satellite and VDSL television services. BCE also holds an
interest in CTVglobemedia, Canada's premier media company. BCE shares are
listed in Canada and the United States. For corporate information on BCE,
please visit www.bce.ca.




For further information:

For further information: Media inquiries: Jacques Bouchard, Bell Media
Relations, (514) 391-2007, 1-877-391-2007, jacques.bouchard1@bell.ca; Investor
inquiries: Thane Fotopoulos, BCE Investor Relations, (514) 870-4619,
thane.fotopoulos@bell.ca

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